FairPoint to challenge municipalities' telephone pole assessments

By Bob Sanders

Published: August 29, 2012

FairPoint Communications says that New Hampshire municipalities are not assessing its telephone poles fairly - assessments can range from as low as $277 to as high as $587 a pole -- but one assessor points out that it's the utility's own fault for not giving cities and towns the information that they've asked for.

FairPoint, however, says it has provided the data.

On Monday, FairPoint launched the latest volley in what might be called the 20 Years Telephone Pole Tax War between municipalities and utilities. The war heated up in February when the Legislature voted to end the exemption from municipal property taxes for telephone poles and conduits.

FairPoint has always contended that, since it pays a state telecommunications tax, the property tax amounts to double taxation. But pole tax proponents say that FairPoint shouldn't be treated differently from electric utilities, which do pay a tax on poles.

According to FairPoint, tax bills for 2011 and 2012 have totaled $11.2 million so far. The company has already asked, and received, approval from the state Public Utilities Commission to pass much of that cost on to the ratepayers, though not as a separate surcharge.

FairPoint also argues that it doesn't make sense to overtax a company trying to bring broadband through the state.

"It is counter-intuitive and ultimately harms the New Hampshire advantage of minimal taxation," said Patrick McHugh, FairPoint's New Hampshire state president. But that's FairPoint's main point.

During the legislative session, the company predicted that municipal assessments would vary, and they have: Tuftonboro's assessment is the highest, at $587 per pole, with Nashua at $277 (a pole right next door in Hudson is assessed $567, the third highest in the state.)Out on the Seacoast, pole valuations vary from Hampton's $300 and Rochester's $291 to Portsmouth's $518."It is inconceivable that a pole in one community could have a 200 percent swing in value in another," said McHugh. "Poles in differing municipalities have no unique characteristics, such as homes with a view and commercial properties designed for business purposes. Poles simply are a piece of wood used to support wires and fiber."

The company says it will be challenging the valuations, requesting abatements and calling on cities towns to review their assessment practices. And it expects other communications companies to do the same.

"While municipalities view this as a windfall, it's highly unlikely that taxpayers will see any benefit," cautioned McHugh. "FairPoint owes it to our customers to challenge such over-inflated valuations."

But, according to Rosann Maurice-Lentz, the assessor in Portsmouth, it's unfair to cry foul while holding back critical information. Maurice-Lentz also is a leading advocate among assessors for taxing FairPoint's poles.

According to Maurice-Lentz, assessors don't know exactly how many poles there are within their borders, nor the kind of condition they're in, so they have asked FairPoint to tell them.

Maurice-Lentz said she drafted a letter to FairPoint asking the utility to provide accurate pole counts and other information.

"They never responded," said Maurice-Lentz.

She said Portsmouth actually tried to count and assess each pole itself, but most small towns don't have the resources. Instead, they mainly use a formula based on the size of a town in terms of miles, a figure that's used to estimate the number of poles.

"Maybe if you give us the correct information, you might get a fair assessment," said Maurice-Lentz. "Don't make us guess at it." FairPoint, however, said that it has provided the information.

"Our consulting firm, Commercial Property Tax Management, provided an extensive amount of data," said Jeff Nevins, a company spokesman. "We cannot imagine how the assessments could be even larger than they currently are given the amount of over-inflation already built into the assessments."

This article appears in the August 24 2012 issue of New Hampshire Business Review